FedEx investing $1 billion to expand its Memphis hub, improve network

Gov. Bill Haslam, flanked by FedEx officials with a FedEx wide-body air freighter in the background, announce a $1 billion upgrade of its world hub in Memphis.(Photo: WAYNE RISHER / The Commercial Appeal)

MEMPHIS — FedEx on Wednesday announced a $1 billion upgrade of its world hub here, an investment that will ensure its future as the nerve center of a $62 billion a year global network.

FedEx Express president and chief executive David Cunningham said the hub transformation project will begin in 2019 and run through 2025.

Cunningham and FedEx founder Frederick W. Smith joined Tennessee Gov. Bill Haslam for the announcement, with a backdrop of a FedEx wide-body air freighter.

Haslam, who said there are no direct state incentives for the project, hailed the company’s investment as good news for Tennessee.

“I want to make certain that no one ever takes FedEx for granted,” Haslam said. “11,000 employees work here. 30,000 FedEx employees work in the greater Memphis area. You can not overstate their importance.”

Haslam added, “When a company like this decides to ... increase their investment to the tune of $1 billion, we want to make certain we recognize that for the significant step it is.”

“They can land these planes and transfer these packages anywhere in the country. We’re thrilled and grateful that that happens in Memphis and we don’t want to let a significant investment like this happen without taking due notice of it.”

The project will transform portions of the hub that has grown up at Memphis International Airport over a 45-year period.

It involves taking out older, obsolete buildings, some of which date back to the World War II era, and build new buildings, conveyor ramps, aircraft gates and other facilities.

Cunningham said, “We will be investing in new sort systems, new automation, new capabilities, modernization of the facility, expanding our truck and unload capabilities here substantially, but we’re also going to be making this a much better place to work for our employees. We’re putting in a lot of modern capabilities to this facility to improve the quality of life and the environment that our employees will have when they’re here working.”

“Our growth in our business is driving this investment. What we see happening with e-commerce, oversized shipments, is a key part of this investment,” Cunningham said.

The Memphis hub will remain the company’s No. 1 hub in the U.S. and globally, Cunningham said, even though the company is investing $1.5 billion in the much-smaller Indianapolis hub.

The Memphis hub covers about 880 acres and has about 3.7 million square feet of facilities under roof. More than 10,000 people work there. It’s served by about 240 flights a day and can handle up to 475,000 shipments an hour.